Vice-President of the European Commission - Responsible for Interinstitutional Relations and Administration

Address to the Oireachtas Joint Committee

Meeting with the Oireachtas Joint Committee on European Union Affairs

Dublin, 16 February 2012

Thank you for your kind invitation to come to Dublin for this exchange of views with Members of the Parliament and your committee in particular.

Clearly, business-as-usual is not an option for Europe. We must change course and get Europe growing. This is why President Barroso has called for a European Renewal. A renewal built on stability and responsibility. On growth and solidarity.

We have an ambitious and workable plan.Europe 2020 is the EU's agreed strategy for economic renewal. It sets out a clear direction for an EU which is smarter, greener and fairer. More competitive. An EU that delivers jobs and lasting prosperity to its citizens.

In a political agenda dominated by immediate urgencies, we must not lose sight of the need for long-term reform. Despite the very necessary efforts to restore public finances to health, we cannot neglect investment in the future. We must put out the fire and lay the foundations of our new house at the same time.

Growth is at the heart of the work programme for 2012. We cannot wave a magic wand to get the economy moving. But we can ensure that when growth returns, we are ready to direct it in the most productive and sustainable direction.

If the key to growth is competitiveness, the key to competitiveness is creating the conditions that help business to thrive. Whether it means modernising the Single Market, reducing bureaucracy, facilitating access to capital or providing support for research and innovation.

As you are of course aware, the European Commissioner for Research, Innovation and Science is Irish. Máire Geoghegan-Quinn will play a key role in developing the EU’s new Research and Innovation Strategy for Europe 2020.

Ireland has benefitted from EU funding in the area of research and development. The Marie Curie Programme has brought in over €60 million to Ireland since 2002. This is a remarkable achievement given that funding is awarded through a fiercely competitive process based on international peer review. Irish Small and Medium Enterprises (SMEs) are among the most successful in getting EU research funding. In total Irish SMEs are receiving an EU financial contribution of €43.4 million representing over one fifth of all EU contribution going to SMEs.

To give just one example, €8 million in EU funding was made available to the Tyndall National Institute in University College Cork in April 2010. The money created 20 new research jobs and will fund 12 cutting edge projects.

The Single Market is the EU's unique motor of growth. As a relatively small, open, trade-dependent economy, Ireland is among the biggest beneficiaries of the Single Market, which provides Irish businesses with access to a market of over 490 million people. But to run smoothly and at full speed, our Single Market must be fuelled and maintained. With the 12 proposals set out in the Single Market Act, the Commission launched the first phase of an ambitious process to bring the Single Market into the 21st century. Early adoption of these proposals would show an EU determined to do everything possible to boost growth and create jobs.

In the digital age, Ireland has become one of the world leaders with hundreds of high-tech companies - including Google, Facebook and Ebay - choosing Ireland as a hub for their European networks. The opportunities presented by the digital Single Market will be of great importance to the Irish economy. Take the example of the on-line music business, which holds great retail potential. The Commission proposes new rules for cross-border licensing to expand the markets for entrepreneurs and artists.

In the first part of this year, we will also propose a common framework for electronic identification and signatures. This can help boost electronic transactions across the EU and encourage both consumers and businesses to make the most of the opportunities available to them.

Efficient, modern infrastructures are the lifeblood of a thriving Single Market. With the Connecting Europe facility, the Commission has proposed a way to support key investment in energy, transport and broadband. To assist public and private actors in creating tomorrow's networks - today.

In 2012, we will also aim to complete the ambitious overhaul of financial regulation and supervision which the Commission has led in recent years. This will provide a stable and transparent environment for healthy, growth-stimulating investment, ensuring that financial institutions serve the real economy rather than undermining its stability.

As in the past, a driver for growth in Ireland will be your strong and broad-based exports. I understand that exports in Ireland last year grew by 6 per cent. An impressive performance! The European Commission is continuing to push for opening markets for European enterprises around the world – we are exploring a possible free trade agreement with Japan as well as an investment agreement with China.

A second key priority for Commission action in 2012 is to ensure that EU's economic renewal is sustainable. It must be a renewal for all.

When we fail to support young people, we jeopardise our future. The high youth unemployment that we witness today is one of our most pressing and serious challenges. Across Europe, millions of young people are out of work. In Ireland the situation has reached an unacceptable level with the youth unemployment rate at just under 30 per cent.

This is lost potential for an economy that desperately needs fresh input. When growth returns, we will need their skills and energy! At the end of last month, President Barroso addressed a letter to Taoiseach Kenny on the topic of youth unemployment. The Commission is going to work hand in hand with the Irish Government the coming days and months to put in place a youth employment plan for Ireland.

Many of the levers of social and employment policy are national, regional or local. But the Commission will propose complementary action at European level based on the flagships for skills and social inclusion.

The Commission will also assist job-seekers in exploring opportunities by enhancing the information systems to better match skills and job openings across borders - and with a Youth on the Move card, particularly for young people.

To date, over €6 billion in ESF funds has been spent in Ireland to co-finance Irish Government spending on training, education and equality programmes designed to equip Irish workers with the skills needed in the modern jobs market.

The economic downturn has left thousands of Irish workers unemployed and the European Globalisation Adjustment Fund (EGF) has been there to support Irish companies – including SR Technics and the Dell facility in Limerick - and help hundreds of workers made redundant back into employment.

Finally, we cannot discuss the EU's political agenda for 2012 without touching on the budget. Much political effort this year will be dedicated to the negotiation of the Commission's proposals for the period 2014-2020. The Commission has focused on simplifying and modernising the EU's spending programmes, to focus on delivering results for EU citizens.

By acting in areas of real EU added value, the EU budget can help to relieve pressure on Member State finances.

Reaching a comprehensive agreement is a key priority for this year.

As the member of the Commission responsible for inter-institutional relations and relations with national parliaments, I wish to emphasise how important it is to have your full engagement in this particular debate. I am very pleased that the Danish presidency has announced its intention to organise a conference on the financial framework involving national parliaments; it will take place on 22 March in Brussels.

This demonstrates how regular direct contacts at political level, between Members of the Commission and national Parliamentarians, are of utmost importance, as they facilitate our communication on key policy projects and foster mutual understanding.

This continuous dialogue is indispensible in particular now that national parliaments have an even more important role to play in European economic governance.

At the informal European Summit of 30 January, the leaders of 25 Member States – including Ireland - reached agreement on a new 'fiscal compact', strengthening fiscal discipline and introducing stricter surveillance and more automaticity in the excessive deficit procedure. There was also an agreement to further strengthen economic coordination in the euro area, for example by the ex-ante discussion of plans for major economic policy reforms.

As you know, the form of this agreement was not the Commission's choice, but rather the consequence of the lack of unanimity to amend the Lisbon Treaty. But the fact that 25 of our 27 Member States have agreed to sign this Treaty, is testament to the solidarity and determination within the Union to resolve this crisis together.

All in all the Commission supports the contents of the international agreement. It builds on the solid foundation laid by the existing legislation (the so-called "six pack").

Last month's informal European Council also sent out a very clear signal that it is not enough to focus on financial stability and fiscal discipline alone. Far from it. All Member States recognised that it is only through growth and job creation that we will rebuild confidence in our economy and hope for the future. This is what our citizens need.

We will only achieve our goals by working together. This is the fundamental principle of the so-called 'European Semester'. National action should be supported and complemented by European action.

And national parliaments have a crucial role to play in Europe's recovery, also through their increasingly prevalent role in the European debate.

Since we launched the 'political dialogue' in 2006, the number of opinions we receive from national Parliaments has increased dramatically (2009: 250 opinions, 2010: 387 opinions, 2011: 620 opinions). A very healthy sign.

An important part of this dialogue is parliamentary scrutiny of subsidiarity. Of the over 1000 opinions received since the entry into force of the Lisbon Treaty, only 87 flagged subsidiarity problems. One of these was a reasoned opinion issued by your Assembly on the Common Consolidated Corporate Tax Base. I know that this is a sensitive issue and I hope that our reply has served to clarify the issues you have raised.

Frank and constructive dialogue is hugely important if we are to find the right responses to the challenges facing Europe. And let me finish by highlighting one particular area where national parliaments play a fundamental role: implementation of EU law.

At the end of the day the success of an economic renewal depends on implementation. It seems self-evident, yet the delivery of results must be our top priority:

First, at national level, efforts to follow-up the 2012 European semester must be stepped up. Despite a high level of political commitment, many of the reforms identified and agreed for 2011 have not been implemented to a sufficient degree. This must change. You play a key role in keeping your government accountable and in helping to deliver on European commitments.

Second, at European level we must focus our political efforts where we get the biggest impact – this is what we call "fast-tracking". The European Council recently called for the fast adoption by EP and Member States of a series of Commission proposals to unleash the potential of the Single Market and complete our Digital Agenda by 2015. The EU patent is an example of where delay brings real costs: if adopted, it would reduce by 80% costs for the inventions of our innovative companies and help to boost R&D. I am hopeful that we will see important breakthroughs soon, but this is an area where you can you’re your governments to account.

Third, we have an implementation gap: Too often we have powerful growth tools at our disposal, which we do not put to full use. The internal energy market or the late payments directives are examples of agreed legislation which is not fully implemented. The results are lost jobs and growth. The Services Directive is another example. Nine out of ten new jobs are created in the services sector; full implementation of the Directive would unlock growth where it can help jobs the most.

If we want to shape tomorrow, we need to act today. We set out for economic renewal in the midst of crisis. Yet, it is worth recalling our fundamentals and potential.

We have plenty to build on. The EU remains the world's largest economy. Our joint production exceeds by 50% the combined GDP of the BRIC countries. We have a strong tradition of social and scientific innovation, which over history has helped us adapt to new challenges. And in the Single Market we have a unique motor of growth, deriving its force from millions of dynamic businesses and the domestic demand of 500 million consumers. We must put all this to use.

Meanwhile, the single most important ingredient in a lasting economic renewal is confidence. The confidence of businesses and investors to pursue new ventures; and the confidence in every individual citizen that her or his efforts make a difference. Restoring that confidence is the overarching political task for 2012. Delivering on our commitments is the first condition. Political intentions must translate into credible action.